Reducing fleet costs is an ongoing challenge for every fleet manager. With so many fleet management costs to consider, such as rising fuel prices, insurance and depreciation, a number of less obvious and indirect costs can often be overlooked.
From maintenance administration to ongoing fleet cleaning, there are many unexpected costs that will have an impact on your bottom line regardless of the size of your operation or the industry you operate in. So, just what are the unexpected expenses that cost fleet managers money…?
1. Not choosing the most appropriate type of service, maintenance and repair (SMR)
Fleet managers will certainly be aware of the costs associated with servicing, maintenance and repair, but there are also a number of hidden or ‘soft’ costs they may not always consider. For example, the administration associated with organising regular servicing, MOTs and emergency repairs can be significant, particularly when dealing with a larger fleet. If you don’t have a dedicated fleet manager, this will be a significant amount of work that shifts someone’s attention away from their primary role.
There are simple steps you can take to reduce this unexpected cost. Simply choosing the most appropriate service, maintenance and repair plan for your fleet could make a big difference. There are four options available:
- Contract hire with full maintenance – If you lease your vehicles, it makes sense to leave the servicing and maintenance work to the leasing company, as they have a vested interesting in maintaining the vehicles to the highest possible standard. This will reduce the administration for your team significantly, but it will increase your fixed costs. This is a good option for larger fleets that don’t have the resources to manage the maintenance themselves.
- Pay-as-you-go – An increasing number of fleets are choosing to pay for SMR on a pay-as-you-go basis. With vehicles becoming more reliable and requiring less regular attention, this type of servicing allows you to only pay for what you need. However, you will have to manage the process yourself in-house, using up valuable time and resources.
- Handle it in-house – If you have a large fleet and want to reduce the downtime of your vehicles as much as possible, you might be best served by creating your own workshop. This will give you full control of the process, but it will require a significant capital injection and generate ongoing costs for staff and equipment.
- Use independent garages – Some smaller fleets use independent garages to take care of SMR. They can be quicker and cheaper than franchised dealers and have lower prices for parts. However, they may not have the capacity for larger fleets or be able to deliver the fast turnaround times many businesses require.
2. Failing to keep your vehicles clean
With increases in the cost of fuel and insurance premiums, the tendency might be to reduce the amount you spend on fleet cleaning to keep your budget in check. However, the reality is that maintaining or even increasing the frequency of your fleet cleaning is more likely to reduce your costs.
Fleet cleaning is one of the most important aspects of vehicle maintenance. Regular fleet cleaning prevents grime from building up, keeps rust at bay and washes away salt and other corrosives before they can do any damage. Failing to keep a clean fleet will allow dirt and grime to build-up in lubricants, causing faster wear of mechanical components and even damaging the electrics.
There are also a number of cosmetic issues infrequent fleet cleaning can cause which will cost you more in the long run. Dirty vehicles are more likely to be stopped for roadside inspections, which means more downtime for your team. There’s also the missed opportunity cost of all those prospective clients and customers who see your dirty vehicles on the road and choose not to be associated with your business.
3. Not fixing your insurance premiums
An increasing number of fleet managers are now choosing to fix their insurance premiums to protect their businesses against price rises in the future. A report from the Association of British Insurers found that claims for repair costs in the first quarter of 2019 were higher than they have ever been before, which is having an inevitable knock-on effect on premiums.
To avoid insurance premiums that rise year-on-year, fleet managers are fixing their insurance costs for a number of years, just as you would a mortgage. This has become a trend among businesses of every size. And of course, there are also numerous other steps businesses can take to reduce their fleet insurance premiums.
4. Not putting a programme of routine maintenance in place
There’s a lot more to routine maintenance than simply giving your vehicles an oil change every 5,000 miles. If that’s the extent of your routine maintenance, you’ll be inadvertently increasing your maintenance and repair requirements and increasing vehicle downtime – all costs your business can do without.
To avoid unforeseen maintenance costs, you should put a thorough checklist in place that will help to keep your vehicles in peak condition. Checking the following at regular intervals is the cost-effective way to stay ahead of common issues:
- Refill the windscreen fluid, check the wipers for wear and replace them if necessary
- Test all exterior lights
- Check for chips, cracks, leaks and other signs of damage
- Report any signs of rust or corrosion
- Change the oil and filters
- Inspect the cooling and fuel systems
- Refill/change the antifreeze
- Assess brake wear and change brakes pads when needed
- Rotate and/or replace tyres as necessary
- Check the condition of wheels and rims
- Inspect the condition of the seats and seatbelts
- Check interior lights, heating and air conditioning
Reducing fleet costs with outsourced fleet cleaning
Outsourcing your fleet cleaning is the best way to keep your fleet looking its best while reducing the associated administration and maintenance costs. At Dropless, we will manage the scheduling of washes for you to save time, money and hassle. Just take a look at our fleet cleaning calculator to see how much you could save. With no harmful runoff and saving more than 300 litres of water per wash, we’ll also give your business’s eco credentials a boost! Get in touch today to find out more.